India-EU Free Trade Agreement: Unlocking Opportunities and Empowering India

Key Chapter Title List

1. Empowering Enterprises, Securing the Future through Seamless Market Access
2. India Gains Strategic Access to the European Market
3. India's Commitment to Openness towards the EU
4. Driving Agricultural Growth and Farmer Livelihoods with Adequate Safeguards
5. Product-Specific Rules of Origin Aligned with Existing Supply Chains
6. Services – The Key Growth Engine for Future Trade
7. Empowering Indian Talent Across Europe
8. Expanding the Horizon for India's Traditional Medicine
9. Innovate, Protect, Prosper: Enhancing Intellectual Property Protection

Document Introduction

India and the European Union announced the conclusion of Free Trade Agreement negotiations, marking a significant milestone in their strategic economic partnership. This agreement aims to establish a modern, rules-based trade partnership designed to address contemporary global challenges while fostering deeper market integration between the world's fourth and second largest economies. In the face of global economic uncertainty, this FTA provides a strategic framework for the evolution of India-EU relations from a traditional model to a modern, multi-faceted partnership, creating a stable and predictable environment for exporters.

The report first outlines the macro context and scale of the agreement. India-EU bilateral merchandise trade was valued at approximately 11.5 trillion INR (136.54 billion USD) in 2024-25, with services trade reaching 7.2 trillion INR (83.1 billion USD). Despite continuous trade growth, the potential remains underutilized relative to the size of each other's markets. This FTA covers a combined market exceeding 2091.6 trillion INR (24 trillion USD) for both parties, presenting unparalleled opportunities for about 2 billion people, aiming to unlock immense trade and innovation potential.

Regarding market access, the report provides a detailed analysis of tariff concession arrangements. India secured preferential access to the European market covering 97% of tariff lines and 99.5% of trade value, with 70.4% of tariff lines (covering 90.7% of India's export value) achieving zero tariffs immediately, benefiting key labor-intensive sectors such as textiles, leather, footwear, tea, coffee, spices, sports goods, toys, and jewelry. India, in turn, will open 92.1% of its tariff lines (covering 97.5% of EU exports to India) to the EU, including 49.6% of lines becoming duty-free immediately, with the rest phased out. The agreement also includes tariff-rate quota mechanisms for products like automobiles and steel.

The report delves into the structural impact of the agreement on specific economic sectors. In agriculture, products like tea, coffee, and spices gain preferential market access, which is expected to enhance competitiveness and increase farmer incomes, while India has prudently protected sensitive areas such as dairy, cereals, and poultry. The Rules of Origin (PSRs) are designed to be balanced and aligned with existing supply chains, introducing a system of Statements on Origin allowing self-certification to reduce compliance costs, providing particular flexibility for Micro, Small, and Medium Enterprises (MSMEs) in sectors like shrimp products and downstream aluminum goods.

Services are viewed as a key growth engine for future trade. The agreement secures deeper commitments from the EU across 144 services sub-sectors, covering IT/ITeS, professional services, education, and more, providing a stable regime for Indian service providers in the EU market. Simultaneously, through an offer covering 102 sub-sectors, India provides a predictable framework for EU enterprises to invest and operate in services such as professional, business, telecommunications, and financial services. The agreement also establishes a mechanism for temporary entry and stay covering business visitors, intra-corporate transferees, contractual service suppliers, and independent professionals, and outlines a framework to conclude social security agreements with all EU Member States within five years.

Furthermore, the report notes that the agreement will provide a boost for India's traditional medicine (AYUSH) services and practitioners to enter the EU market. In EU Member States without relevant regulations, AYUSH practitioners can provide services based on professional qualifications obtained in India, and openness for establishing AYUSH wellness centers and clinics in the EU is locked in. Regarding intellectual property, the agreement strengthens protections for copyrights, trademarks, trade secrets, etc., in line with the TRIPS Agreement, and affirms the importance of the Doha Declaration and digital libraries.

Overall, this assessment concludes that the India-EU FTA, through deep integration of goods, services, and investment markets, not only aims to unlock short-term trade potential but is also committed to empowering Indian enterprises (including MSMEs) to integrate into European and global value chains, facilitating technology acquisition, skills mobility, and knowledge-driven economic growth, thereby providing crucial economic and strategic support for India's long-term development vision of India@2047.